ECONOMY


Privatization of Greek gas grid operator DESFA fails

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Baku, December 1, AZERTAC

Greece said that talks to sell a 66% stake in gas grid operator DESFA to Azerbaijan’s state-owned oil company, SOCAR, were not successful, according to EurActiv.

The Greek energy ministry said SOCAR’s proposal to reduce the price of the €400 million deal was not feasible from a legal standpoint and would cancel the tender.

“These discussions have ended,” the ministry said in a statement, referring to talks with SOCAR and Snam, the Italian group which has formed an alliance with the Azeri giant.

The ministry said the SOCAR and Snam consortium, which was interested in acquiring a 17% stake in DESFA, wanted to pay in installments, a proposal rejected as legally unworkable, leading to negotiations on “alternative options”, which in the end came to nothing.

Vitaly Baylarbayov, deputy vice-president of SOCAR, recently told EurActiv.com that while the negotiations dragged on since Azerbaijan won the tender in December 2013, the price of DESFA reduced, and that’s why the sides needed to find a compromise.

The deal was further marred by more uncertainty when Greece passed a law that raised DESFA’s gas tariffs by a much lower amount than expected.

The ministry may soon launch a tender for the sale, foreseen as part of a programme of privatizations demanded by Greece’s EU and International Monetary Fund (IMF) creditors.

A Greek energy ministry official told Reuters that the DESFA privatization remains a commitment under the country’s international bailout plan, and that the government would decide on its next steps next week.

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